More Exchange Money Headed to States

New federal money is headed to ten states to help them establish insurance exchanges through which individuals and small businesses can buy insurance beginning in 2014. The Department of Health and Human Services is sending a total of $229 million in exchange establishment grants to ten states, the agency announced Wednesday. Half are receiving this kind of grant for the first time, and half are on the second round.

The new recipients are Colorado and Massachusetts, which have already passed legislation to create a state-run exchange, and New Jersey and Pennsylvania, which have legislation pending. Arkansas, where legislation has failed but the state is still actively planning its role in a federal exchange, also received federal funds for the first time. The states building on earlier grants are Kentucky, Minnesota, Nevada, New York and Tennessee. That brings to 33 the number of states that have received the grants.

Under the health law, 2012 was supposed to be the last year that states could receive the establishment grants. But Steven Larsen, director of the Center for Consumer Information and Insurance Oversight at HHS, said that the government would soon extend the deadline to the end of 2014. Under the health law, state exchanges must be fully operational by January 1, 2014, and states are at varying stages of implementation.

These grants are not the same as the initial exchange planning money that went to nearly every state.

HHS also today issued a final rule aimed at ensuring that the process for granting or renewing demonstration projects for Medicaid and the state Children’s Health Insurance Program is transparent and allows for “meaningful public input.”

Another final rule today released by HHS and the Department of Treasury is aimed at “providing more flexibility to states” that want waivers to use their own approaches to insuring more people.